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Real Estate Glossary - M
Margin
The difference between the interest rate and the index
on an adjustable rate mortgage. The margin remains
stable over the life of the loan. It is the index which
moves up and down.
Maturity
The date on which the principal balance of a loan, bond,
or other financial instrument becomes due and payable.
Merged Credit Report
A credit report which reports the raw data pulled from
two or more of the major credit repositories. Contrast
with a Residential Mortgage Credit Report (RMCR) or a
standard factual credit report.
Modification
Occasionally, a lender will agree to modify the terms of
your mortgage without requiring you t refinance. If any
changes are made, it is called a modification.
Mortgage
A legal document that pledges a property to the lender
as security for payment of a debt. Instead of mortgages,
some states use First Trust Deeds.
Mortgage Banker
For a more complete discussion of mortgage banker, see
"Types of Lenders." A mortgage banker is generally
assumed to originate and fund their own loans, which are
then sold on the secondary market, usually to Fannie
Mae, Freddie Mac, or Ginnie Mae. However, firms rather
loosely apply this term to themselves, whether they are
true mortgage bankers or simply mortgage brokers or
correspondents.
Mortgage Broker
A mortgage company that originates loans, then places
those loans with a variety of other lending institutions
with whom they usually have pre-established
relationships.
Mortgage Constant
The factor used for rapid computation of the annual
payment needed to amortize a loan.
Mortgage Insurance
Insurance that covers the lender against some of the
losses incurred as a result of a default on a home loan.
Often mistakenly referred to as PMI, which is actually
the name of one of the larger mortgage insurers.
Mortgage insurance is usually required in one form or
another on all loans that have a loan-to-value higher
than eighty percent. Mortgages above 80% LTV that call
themselves "No MI" are usually a made at a higher
interest rate. Instead of the borrower paying the
mortgage insurance premiums directly, they pay a higher
interest rate to the lender, which then pays the
mortgage insurance themselves. Also, FHA loans and
certain first-time homebuyer programs require mortgage
insurance regardless of the loan-to-value.
Mortgage Insurance Premium
The amount paid by a mortgagor for mortgage insurance,
either to a government agency such as the Federal
Housing Administration (FHA) or to a private mortgage
insurance (MI) company.
Mortgage Life and Disability Insurance
A type of term life insurance often bought by borrowers.
The amount of coverage decreases as the principal
balance declines. Some policies also cover the borrower
in the event of disability. In the event that the
borrower dies while the policy is in force, the debt is
automatically satisfied by insurance proceeds. In the
case of disability insurance, the insurance will make
the mortgage payment for a specified amount of time
during the disability. Be careful to read the terms of
coverage, however, because often the coverage does not
start immediately upon the disability, but after a
specified period, sometime forty-five days.
Mortgagee
The lender in a mortgage agreement.
Mortgagor
The borrower in a mortgage agreement.
Multi-dwelling Units
Properties that provide separate housing units for more
than one family, although they secure only a single
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